Restaurants and Hoteliers can sell water and aerated drinks above MRP – HRAWI

Hotels and restaurants can continue to sell water, aerated drinks and similar commodities above the maximum retail price (MRP). This ambiguity was cleared in a circular issued by the Hotel and Restaurant Association of Western India (HRAWI). However, if such commodities are being sold over the counter, it is advised that they be sold at the MRP only.

HRAWI issued the notice in response to members’ queries after a section of the media carried a news item that selling the aforementioned beverages above the MRP could attract a fine and imprisonment. It quoted consumer affairs minister Ram Vilas Paswan. Some news items erroneously stated that the HRAWI’s cases had been dismissed by the High Court and the Supreme Court.

“Running the story without appropriate verification has caused confusion and misunderstanding between hoteliers and their patrons. As per the present law, there are no legal repercussions that can prosecute a hotel or restaurant for the sale of either packaged drinking water, aerated drinks or any such commodity above the MRP while being served on the premises, i.e. inside hotels and restaurants,” said Pradeep Shetty, honorary secretary HRAWI, and chairman, legal matters sub-committee, Federation of Hotel and Restaurant Associations of India (FHRAI) and HRAWI.

“So we have advised our members that they can continue selling at suitable rates, as the MRP law applies to retailers only,” he added.

FHRAI filed a writ petition before the Delhi High Court challenging the notices issued under the then prevailing law, namely the Standards of Weights and Measures Act, for serving water above the MRP.

The Ld. Single Judge of the Delhi High Court by judgment dated March 5, 2007 in W P No 6517 of 2003 allowed the writ petition filed by FHRAI holding inter alia that, “…charging prices for mineral water in excess of MRP printed on the packaging, during the service of customers in hotels and restaurants does not violate any of the provisions of the SWM Act as this does not constitute a sale or transfer of these commodities by the hotelier or restaurateur to its customers. The customer does not enter a hotel or a restaurant to make a simple purchase of these commodities. It may well be that a client would order nothing beyond a bottle of water or a beverage, but his direct purpose in doing so would clearly travel to enjoying the ambience available therein and incidentally to the order of any article for consumption…”

“Thereafter, two other courts (the Kerala and Delhi High Court) also held non-applicability of MRP to items sold in hotels and restaurants. It is regrettable that wong information continues to circulate even on matters like these. Nobody comes to a hotel or a restaurant to purchase goods or commodities; they come to our establishments to enjoy service and ambiance. As hoteliers, our primary focus is on providing memorable experiences,” concluded Datwani, president, HRAWI.

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